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Asset-Based Carriers: Does Your Business Need An Asset-Based Carrier?

When you need to transport your goods, you may be wondering if your business needs an asset-based carrier. Asset-based carriers provide a multitude of services and can support your business throughout your entire supply chain. However, asset-based carriers may not be right for every business. When you are assessing your options, it is important to understand what asset-based carriers do, what benefits and challenges may arise when working with asset-based carriers, how asset-based carriers and brokers differ, and how to find a trustworthy logistics provider for your business. 

What is an asset-based carrier?

An asset-based carrier is a full-service logistics company that owns and operates their own fleet. Asset-based carriers employ drivers and a full-service staff. They also own containers and storage facilities. Asset-based carriers are equipped and staffed to provide everything you may need from the time the goods are completed, including packaging, storage, inventory control, shipping, and receiving. 

In some circumstances, working with an asset-based carrier can save businesses money. When a business partners with an asset-based company, they do not have to subcontract out any of the logistics processes and potentially pay additional markups along the way. 

What are the benefits of working with asset-based carriers?

There are many benefits of working with asset-based carriers. 

  1. Consistent Service and Price

Asset-based carriers control the entire logistics process in-house, so you can reliably know what to expect in terms of price and service quality.

  1. Simplify the Arrangement of Intermodal Transportation

If you want to move your freight as efficiently as possible, you likely want to utilize both road and rail transport. Large asset-based carriers typically provide multiple types of transportation under one roof so you do not have to juggle arrangements with multiple, separate carriers. 

  1. Drop and Hook Shipping is an Option

Asset-based carriers are able to drop off one trailer and pick up another one which allows shoppers and receivers to load and unload at their leisure. 

What are the challenges of working with asset-based carriers?

Just like anything else, asset-based carriers come with a few potential challenges. 

  1. Limited Capacity for Coverage

The coverage an asset-based carrier can provide depends upon the fleet and driver availability. 

  1. Greater Financial Risk

Asset-based carriers own all of their own equipment, containers, and warehouses which exposes them to financial risk. If demand slows down, they still have bills to pay. This risk could result in a business shutting down during a slump in demand. 

Asset-Based Carriers vs. Brokers: What are the differences?

Asset-based carriers and brokers are often conflated because they seem very similar, but they are actually different types of logistics providers. Asset-based carriers and brokers differ in a few meaningful ways: 

Asset-Ownership

Unlike asset-based carriers, freight brokers do not own their assets. Instead, they utilize a network of carriers to provide shippers with logistic services. 

Coverage

The coverage that asset-based carriers can provide is based on the availability of their drivers and fleet. The coverage that a freight broker can provide is based on the quality and extent of their network. Freight brokers are better positioned to provide shipping services at the last minute. Asset-based carriers can only offer shipping if they have an available truck and driver. 

Adaptability

The differences in adaptability pertain to both transportation logistics and the enterprise. 

If a change needs to be made to a shipping route or destination, asset-based carriers can easily call and ask drivers to change course or destination. Freight brokers can ask drivers to make a change, but drivers may decline. When this happens, freight brokers have to find another carrier for the load. 

If a freight broker wants to scale their business up or down, they can easily do so. If an asset-based carrier wants to make a change to the scale of their business, they have to buy or sell equipment and hire or lay-off employees. 

After reading about these differences, you may be wondering if it is possible to take advantage of what asset-based carriers and freight brokers have to offer. The answer is yes. 

Why First Star Logistics?

We are a unique asset-based global logistics provider. Our core business is the transport of your freight by arranging and securing space for your shipment between states and countries via common carriers such as trucks, railroads, and ocean liners. Clients benefit from a comprehensive North American network and global reach, along with time and money-saving technology that delivers. We have an in-house freight brokerage department, and we believe that our first responsibility is to our clients who depend on us to transport shipments safely, securely, and on time. 

To put your shipments in the hands of an experienced, trustworthy logistics provider, contact First Star Logistics today!